Principal Life has established special purpose entities to issue secured medium-term notes. Under the program, the payment obligations of principal and interest on the notes are secured by funding agreements issued by Principal Life. Principal Life's payment obligations on the funding agreements are fully and unconditionally guaranteed by PFG. All of the outstanding stock of Principal Life is indirectly owned by PFG and PFG is the only guarantor of the payment obligations of the funding agreements.

The following tables set forth condensed consolidating financial information of (i) PFG, (ii) Principal Life, (iii) Principal Financial Services, Inc. ("PFS") and all other direct and indirect subsidiaries of PFG on a combined basis and (iv) the eliminations necessary to arrive at the information for PFG on a consolidated basis as of December 31, 2012 and 2011, and for the years ended December 31, 2012, 2011 and 2010.

In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) PFG's interest in PFS, (ii) Principal Life's interest in all direct subsidiaries of Principal Life and (iii) PFS's interest in Principal Life even though all such subsidiaries meet the requirements to be consolidated under U.S. GAAP. Earnings of subsidiaries are, therefore, reflected in the parent's investment and earnings. All intercompany balances and transactions, including elimination of the parent's investment in subsidiaries, between PFG, Principal Life and PFS and all other subsidiaries have been eliminated, as shown in the column "Eliminations." These condensed consolidating financial statements should be read in conjunction with the consolidated financial statements. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the subsidiaries operated as independent entities.

	Principal Financial Group, Inc. Parent Only			Principal Life Insurance Company Only		Principal Financial Services, Inc. and Other Subsidiaries Combined		Eliminations			Principal Financial Group, Inc. Consolidated

	(in millions)
Assets
Fixed maturities, available-for-sale	$	—		$	44,614.6	$	6,681.7	$	(357.0	)	$	50,939.3
Fixed maturities, trading		10.5			284.4		331.8		—			626.7
Equity securities, available-for-sale		—			131.3		5.2		—			136.5
Equity securities, trading		—			0.3		252.5		—			252.8
Mortgage loans		—			10,054.2		1,775.5		(310.0	)		11,519.7
Real estate		—			8.4		1,171.9		—			1,180.3
Policy loans		—			834.0		30.9		—			864.9
Investment in unconsolidated entities		11,923.0			3,309.2		4,808.3		(19,171.5	)		869.0
Other investments		11.1			2,834.0		1,208.4		(1,631.4	)		2,422.1
Cash and cash equivalents		207.1			1,698.4		2,286.9		(15.2	)		4,177.2
Accrued investment income		—			521.6		64.5		(1.7	)		584.4
Premiums due and other receivables		0.1			916.7		1,327.1		(1,159.5	)		1,084.4
Deferred policy acquisition costs		—			2,394.8		279.0		—			2,673.8
Property and equipment		—			402.2		62.0		—			464.2
Goodwill		—			54.3		489.1		—			543.4
Other intangibles		—			27.9		899.3		—			927.2
Separate account assets		—			69,217.8		12,436.0		—			81,653.8
Other assets		78.1			947.8		1,567.6		(1,586.7	)		1,006.8

Total assets	$	12,229.9		$	138,251.9	$	35,677.7	$	(24,233.0	)	$	161,926.5

Liabilities
Contractholder funds	$	—		$	37,053.3	$	1,011.9	$	(278.7	)	$	37,786.5
Future policy benefits and claims		—			17,944.9		4,679.6		(188.3	)		22,436.2
Other policyholder funds		—			676.5		40.3		(0.4	)		716.4
Short-term debt		—			—		40.8		—			40.8
Long-term debt		2,448.6			99.4		433.3		(310.0	)		2,671.3
Income taxes currently payable		—			—		84.7		(69.4	)		15.3
Deferred income taxes		—			324.5		404.9		(102.9	)		626.5
Separate account liabilities		—			69,217.8		12,436.0		—			81,653.8
Other liabilities		28.1			5,375.1		4,538.4		(3,795.5	)		6,146.1

Total liabilities		2,476.7			130,691.5		23,669.9		(4,745.2	)		152,092.9
Redeemable noncontrolling interest		—			—		60.4		—			60.4
Stockholders' equity
Series A preferred stock		—			—		—		—			—
Series B preferred stock		0.1			—		—		—			0.1
Common stock		4.5			2.5		—		(2.5	)		4.5
Additional paid-in capital		9,730.9			5,747.6		9,393.8		(15,141.4	)		9,730.9
Retained earnings		4,940.2			1,167.7		1,861.5		(3,029.2	)		4,940.2
Accumulated other comprehensive income		631.9			642.6		667.7		(1,310.3	)		631.9
Treasury stock, at cost		(5,554.4	)		—		—		—			(5,554.4	)

Total stockholders' equity attributable to PFG		9,753.2			7,560.4		11,923.0		(19,483.4	)		9,753.2
Noncontrolling interest		—			—		24.4		(4.4	)		20.0

Total stockholders' equity		9,753.2			7,560.4		11,947.4		(19,487.8	)		9,773.2

Total liabilities and stockholders' equity	$	12,229.9		$	138,251.9	$	35,677.7	$	(24,233.0	)	$	161,926.5

	Principal Financial Group, Inc. Parent Only			Principal Life Insurance Company Only			Principal Financial Services, Inc. and Other Subsidiaries Combined		Eliminations			Principal Financial Group, Inc. Consolidated

	(in millions)
Assets
Fixed maturities, available-for-sale	$	—		$	43,285.3		$	6,082.4	$	(361.0	)	$	49,006.7
Fixed maturities, trading		268.7			374.8			328.2		—			971.7
Equity securities, available-for-sale		—			73.4			3.7		—			77.1
Equity securities, trading		—			0.3			404.5		—			404.8
Mortgage loans		—			9,271.5			1,831.8		(376.1	)		10,727.2
Real estate		—			9.2			1,084.9		(1.2	)		1,092.9
Policy loans		—			859.3			25.8		—			885.1
Investment in unconsolidated entities		9,828.0			3,115.7			4,718.4		(16,834.8	)		827.3
Other investments		7.0			2,559.0			925.3		(1,332.8	)		2,158.5
Cash and cash equivalents		226.7			1,344.5			1,277.6		(14.9	)		2,833.9
Accrued investment income		1.8			551.1			66.6		(4.3	)		615.2
Premiums due and other receivables		—			969.1			827.7		(600.3	)		1,196.5
Deferred policy acquisition costs		—			2,197.4			230.6		—			2,428.0
Property and equipment		—			395.9			61.3		—			457.2
Goodwill		—			54.3			428.0		—			482.3
Other intangibles		—			29.2			861.4		—			890.6
Separate account assets		—			61,615.1			9,749.3		—			71,364.4
Other assets		14.8			668.9			994.7		(736.1	)		942.3

Total assets	$	10,347.0		$	127,374.0		$	29,902.2	$	(20,261.5	)	$	147,361.7

Liabilities
Contractholder funds	$	—		$	37,356.8		$	586.7	$	(267.1	)	$	37,676.4
Future policy benefits and claims		—			16,373.3			3,937.9		(100.8	)		20,210.4
Other policyholder funds		—			519.7			29.0		(0.1	)		548.6
Short-term debt		—			—			105.2		—			105.2
Long-term debt		1,351.7			99.4			504.8		(391.1	)		1,564.8
Income taxes currently payable		(18.6	)		(218.4	)		34.3		205.8			3.1
Deferred income taxes		(22.5	)		90.6			155.2		(14.6	)		208.7
Separate account liabilities		—			61,615.1			9,749.3		—			71,364.4
Other liabilities		18.5			4,293.3			4,591.5		(2,617.1	)		6,286.2

Total liabilities		1,329.1			120,129.8			19,693.9		(3,185.0	)		137,967.8
Redeemable noncontrolling interest		—			—			22.2		—			22.2
Stockholders' equity
Series A preferred stock		—			—			—		—			—
Series B preferred stock		0.1			—			—		—			0.1
Common stock		4.5			2.5			—		(2.5	)		4.5
Additional paid-in capital		9,634.7			5,718.1			7,870.2		(13,588.3	)		9,634.7
Retained earnings		4,402.3			1,195.0			1,660.3		(2,855.3	)		4,402.3
Accumulated other comprehensive income		258.0			328.6			297.5		(626.1	)		258.0
Treasury stock, at cost		(5,281.7	)		—			—		—			(5,281.7	)

Total stockholders' equity attributable to PFG		9,017.9			7,244.2			9,828.0		(17,072.2	)		9,017.9
Noncontrolling interest		—			—			358.1		(4.3	)		353.8

Total stockholders' equity		9,017.9			7,244.2			10,186.1		(17,076.5	)		9,371.7

Total liabilities and stockholders' equity	$	10,347.0		$	127,374.0		$	29,902.2	$	(20,261.5	)	$	147,361.7

Condensed Consolidating Statements of Operations
For the year ended December 31, 2012

	Principal Financial Group, Inc. Parent Only			Principal Life Insurance Company Only			Principal Financial Services, Inc. and Other Subsidiaries Combined			Eliminations			Principal Financial Group, Inc. Consolidated

	(in millions)
Revenues
Premiums and other considerations	$	—		$	2,878.9		$	340.5		$	—		$	3,219.4
Fees and other revenues		0.5			1,529.7			1,404.1			(307.6	)		2,626.7
Net investment income		3.0			2,484.5			743.4			24.0			3,254.9
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities		0.3			(194.8	)		454.8			(27.6	)		232.7
Total other-than-temporary impairment losses on available-for-sale securities		—			(121.1	)		(14.8	)		—			(135.9	)
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to other comprehensive income		—			13.8			3.5			—			17.3

Net impairment losses on available-for-sale securities		—			(107.3	)		(11.3	)		—			(118.6	)

Net realized capital gains (losses)		0.3			(302.1	)		443.5			(27.6	)		114.1

Total revenues		3.8			6,591.0			2,931.5			(311.2	)		9,215.1
Expenses
Benefits, claims and settlement expenses		—			4,517.8			618.5			(12.4	)		5,123.9
Dividends to policyholders		—			197.7			—			—			197.7
Operating expenses		170.2			1,764.2			1,265.6			(265.9	)		2,934.1

Total expenses		170.2			6,479.7			1,884.1			(278.3	)		8,255.7

Income (loss) before income taxes		(166.4	)		111.3			1,047.4			(32.9	)		959.4
Income taxes (benefits)		(67.6	)		(83.2	)		287.2			(1.7	)		134.7
Equity in the net income of subsidiaries		904.7			480.4			163.9			(1,549.0	)		—

Net income		805.9			674.9			924.1			(1,580.2	)		824.7
Net income attributable to noncontrolling interest		—			—			19.4			(0.6	)		18.8

Net income attributable to PFG		805.9			674.9			904.7			(1,579.6	)		805.9
Preferred stock dividends		33.0			—			—			—			33.0

Net income available to common stockholders	$	772.9		$	674.9		$	904.7		$	(1,579.6	)	$	772.9

Net income	$	805.9		$	674.9		$	924.1		$	(1,580.2	)	$	824.7
Other comprehensive income		326.2			315.2			100.1			(366.4	)		375.1

Comprehensive income	$	1,132.1		$	990.1		$	1,024.2		$	(1,946.6	)	$	1,199.8

Condensed Consolidating Statements of Operations
For the year ended December 31, 2011

	Principal Financial Group, Inc. Parent Only			Principal Life Insurance Company Only			Principal Financial Services, Inc. and Other Subsidiaries Combined			Eliminations			Principal Financial Group, Inc. Consolidated

	(in millions)
Revenues
Premiums and other considerations	$	—		$	2,579.6		$	311.4		$	—		$	2,891.0
Fees and other revenues		0.2			1,566.7			1,257.6			(297.8	)		2,526.7
Net investment income (loss)		(12.0	)		2,578.9			763.2			45.2			3,375.3
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities		—			442.8			(388.7	)		20.9			75.0
Total other-than-temporary impairment losses on available-for-sale securities		—			(130.6	)		(17.0	)		—			(147.6	)
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income		—			(51.5	)		1.8			—			(49.7	)

Net impairment losses on available-for-sale securities		—			(182.1	)		(15.2	)		—			(197.3	)

Net realized capital gains (losses)		—			260.7			(403.9	)		20.9			(122.3	)

Total revenues		(11.8	)		6,985.9			1,928.3			(231.7	)		8,670.7
Expenses
Benefits, claims and settlement expenses		—			4,013.0			616.9			(13.3	)		4,616.6
Dividends to policyholders		—			210.2			—			—			210.2
Operating expenses		116.0			1,965.0			1,122.6			(252.8	)		2,950.8

Total expenses		116.0			6,188.2			1,739.5			(266.1	)		7,777.6

Income (loss) before income taxes		(127.8	)		797.7			188.8			34.4			893.1
Income taxes (benefits)		(50.4	)		267.0			(12.6	)		0.2			204.2
Equity in the net income of subsidiaries		730.1			7.2			565.1			(1,302.4	)		—

Net income		652.7			537.9			766.5			(1,268.2	)		688.9
Net income attributable to noncontrolling interest		—			—			36.4			(0.2	)		36.2

Net income attributable to PFG		652.7			537.9			730.1			(1,268.0	)		652.7
Preferred stock dividends		33.0			—			—			—			33.0

Net income available to common stockholders	$	619.7		$	537.9		$	730.1		$	(1,268.0	)	$	619.7

Net income	$	652.7		$	537.9		$	766.5		$	(1,268.2	)	$	688.9
Other comprehensive income (loss)		12.2			100.1			(175.2	)		13.7			(49.2	)

Comprehensive income	$	664.9		$	638.0		$	591.3		$	(1,254.5	)	$	639.7

Condensed Consolidating Statements of Operations
For the year ended December 31, 2010

	Principal Financial Group, Inc. Parent Only			Principal Life Insurance Company Only			Principal Financial Services, Inc. and Other Subsidiaries Combined			Eliminations			Principal Financial Group, Inc. Consolidated

	(in millions)
Revenues
Premiums and other considerations	$	—		$	3,260.2		$	295.3		$	—		$	3,555.5
Fees and other revenues		0.1			1,483.0			1,139.1			(285.1	)		2,337.1
Net investment income		33.2			2,800.9			628.3			33.4			3,495.8
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities		0.7			160.2			(110.6	)		(0.3	)		50.0
Total other-than-temporary impairment losses on available-for-sale securities		—			(284.7	)		(11.6	)		—			(296.3	)
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to other comprehensive income		—			51.6			4.5			—			56.1

Net impairment losses on available-for-sale securities		—			(233.1	)		(7.1	)		—			(240.2	)

Net realized capital gains (losses)		0.7			(72.9	)		(117.7	)		(0.3	)		(190.2	)

Total revenues		34.0			7,471.2			1,945.0			(252.0	)		9,198.2
Expenses
Benefits, claims and settlement expenses		—			4,700.8			520.6			(17.1	)		5,204.3
Dividends to policyholders		—			219.9			—			—			219.9
Operating expenses		117.0			2,069.1			1,040.3			(238.1	)		2,988.3

Total expenses		117.0			6,989.8			1,560.9			(255.2	)		8,412.5

Income (loss) before income taxes		(83.0	)		481.4			384.1			3.2			785.7
Income taxes (benefits)		(31.6	)		101.4			35.1			—			104.9
Equity in the net income of subsidiaries		714.3			72.5			383.4			(1,170.2	)		—

Net income		662.9			452.5			732.4			(1,167.0	)		680.8
Net income attributable to noncontrolling interest		—			—			18.1			(0.2	)		17.9

Net income attributable to PFG		662.9			452.5			714.3			(1,166.8	)		662.9
Preferred stock dividends		33.0			—			—			—			33.0

Net income available to common stockholders	$	629.9		$	452.5		$	714.3		$	(1,166.8	)	$	629.9

Net income	$	662.9		$	452.5		$	732.4		$	(1,167.0	)	$	680.8
Other comprehensive income		1,341.1			1,301.8			130.6			(1,440.9	)		1,332.6

Comprehensive income	$	2,004.0		$	1,754.3		$	863.0		$	(2,607.9	)	$	2,013.4

Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2012

	Principal Financial Group, Inc. Parent Only			Principal Life Insurance Company Only			Principal Financial Services, Inc. and Other Subsidiaries Combined			Eliminations			Principal Financial Group, Inc. Consolidated

	(in millions)
Operating activities
Net cash provided by (used in) operating activities	$	204.8		$	3,133.8		$	(377.1	)	$	119.4		$	3,080.9
Investing activities
Available-for-sale securities:
Purchases		—			(7,254.5	)		(1,024.9	)		15.5			(8,263.9	)
Sales		—			1,183.9			134.8			(15.0	)		1,303.7
Maturities		—			5,805.7			841.8			—			6,647.5
Mortgage loans acquired or originated		—			(2,224.8	)		(250.4	)		(63.2	)		(2,538.4	)
Mortgage loans sold or repaid		—			1,422.2			382.3			(136.5	)		1,668.0
Real estate acquired		—			—			(151.8	)		—			(151.8	)
Net purchases of property and equipment		—			(22.2	)		(16.7	)		—			(38.9	)
Purchases of interests in subsidiaries, net of cash acquired		—			—			(80.4	)		—			(80.4	)
Dividends and returns of capital received from (contributions to) unconsolidated entities		(759.2	)		299.2			714.8			(254.8	)		—
Net change in other investments		(0.2	)		(148.4	)		(7.0	)		(1.6	)		(157.2	)

Net cash provided by (used in) investing activities		(759.4	)		(938.9	)		542.5			(455.6	)		(1,611.4	)
Financing activities
Issuance of common stock		28.9			—			—			—			28.9
Acquisition of treasury stock		(272.7	)		—			—			—			(272.7	)
Proceeds from financing element derivatives		—			51.8			—			—			51.8
Payments for financing element derivatives		—			(49.9	)		—			—			(49.9	)
Excess tax benefits from share-based payment arrangements		—			5.1			5.7			—			10.8
Dividends to common stockholders		(231.3	)		—			—			—			(231.3	)
Dividends to preferred stockholders		(33.0	)		—			—			—			(33.0	)
Issuance of long-term debt		1,483.9			—			9.5			—			1,493.4
Principal repayments of long-term debt		(440.8	)		—			(90.9	)		81.1			(450.6	)
Net repayments of short-term borrowings		—			—			(68.8	)		—			(68.8	)
Capital received from (dividends and capital paid to) parent		—			(714.8	)		460.0			254.8			—
Investment contract deposits		—			6,401.2			499.2			—			6,900.4
Investment contract withdrawals		—			(7,519.8	)		(2.8	)		—			(7,522.6	)
Net increase in banking operation deposits		—			—			32.0			—			32.0
Other		—			(14.6	)		—			—			(14.6	)

Net cash provided by (used in) financing activities		535.0			(1,841.0	)		843.9			335.9			(126.2	)

Net increase (decrease) in cash and cash equivalents		(19.6	)		353.9			1,009.3			(0.3	)		1,343.3
Cash and cash equivalents at beginning of period		226.7			1,344.5			1,277.6			(14.9	)		2,833.9

Cash and cash equivalents at end of period	$	207.1		$	1,698.4		$	2,286.9		$	(15.2	)	$	4,177.2

Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2011

	Principal Financial Group, Inc. Parent Only			Principal Life Insurance Company Only			Principal Financial Services, Inc. and Other Subsidiaries Combined			Eliminations			Principal Financial Group, Inc. Consolidated

	(in millions)
Operating activities
Net cash provided by (used in) operating activities	$	(73.3	)	$	2,495.5		$	374.7		$	(83.6	)	$	2,713.3
Investing activities
Available-for-sale securities:
Purchases		(4.4	)		(6,047.2	)		(696.8	)		6.0			(6,742.4	)
Sales		200.0			689.5			116.2			(25.0	)		980.7
Maturities		4.4			5,037.0			719.4			—			5,760.8
Mortgage loans acquired or originated		—			(1,372.7	)		(169.0	)		56.8			(1,484.9	)
Mortgage loans sold or repaid		—			1,548.6			339.3			(94.8	)		1,793.1
Real estate acquired		—			(0.3	)		(129.6	)		—			(129.9	)
Net purchases of property and equipment		—			(46.7	)		(10.2	)		—			(56.9	)
Purchases of interests in subsidiaries, net of cash acquired		—			—			(270.5	)		—			(270.5	)
Dividends and returns of capital received from unconsolidated entities		506.5			327.9			756.5			(1,590.9	)		—
Net change in other investments		(0.2	)		(48.1	)		14.5			(18.3	)		(52.1	)

Net cash provided by (used in) investing activities		706.3			88.0			669.8			(1,666.2	)		(202.1	)
Financing activities
Issuance of common stock		25.9			—			—			—			25.9
Acquisition of treasury stock		(556.4	)		—			—			—			(556.4	)
Proceeds from financing element derivatives		—			75.9			—			—			75.9
Payments for financing element derivatives		—			(46.5	)		—			—			(46.5	)
Excess tax benefits from share-based payment arrangements		—			0.8			1.2			—			2.0
Dividends to common stockholders		(213.7	)		—			—			—			(213.7	)
Dividends to preferred stockholders		(33.0	)		—			—			—			(33.0	)
Principal repayments of long-term debt		—			—			(69.4	)		57.2			(12.2	)
Net proceeds from short-term borrowings		—			—			3.2			—			3.2
Dividends and capital paid to parent		—			(756.5	)		(834.4	)		1,590.9			—
Investment contract deposits		—			5,868.7			433.4			—			6,302.1
Investment contract withdrawals		—			(7,076.7	)		(2.3	)		—			(7,079.0	)
Net decrease in banking operation deposits		—			—			(18.5	)		—			(18.5	)
Other		—			(4.5	)		—			—			(4.5	)

Net cash used in financing activities		(777.2	)		(1,938.8	)		(486.8	)		1,648.1			(1,554.7	)

Net increase (decrease) in cash and cash equivalents		(144.2	)		644.7			557.7			(101.7	)		956.5
Cash and cash equivalents at beginning of period		370.9			699.8			719.9			86.8			1,877.4

Cash and cash equivalents at end of period	$	226.7		$	1,344.5		$	1,277.6		$	(14.9	)	$	2,833.9

Condensed Consolidating Statements of Cash Flows
For the year ended December 31, 2010

	Principal Financial Group, Inc. Parent Only			Principal Life Insurance Company Only			Principal Financial Services, Inc. and Other Subsidiaries Combined			Eliminations			Principal Financial Group, Inc. Consolidated

	(in millions)
Operating activities
Net cash provided by operating activities	$	29.3		$	2,374.5		$	414.8		$	(26.9	)	$	2,791.7
Investing activities
Available-for-sale securities:
Purchases		(286.8	)		(5,631.7	)		(1,273.5	)		4.1			(7,187.9	)
Sales		95.5			1,240.8			380.3			(32.0	)		1,684.6
Maturities		117.9			4,390.7			652.7			—			5,161.3
Mortgage loans acquired or originated		—			(1,209.4	)		(295.8	)		233.2			(1,272.0	)
Mortgage loans sold or repaid		—			1,624.1			422.6			(248.7	)		1,798.0
Real estate acquired		—			(0.2	)		(53.6	)		—			(53.8	)
Net purchases of property and equipment		—			(4.3	)		(17.2	)		—			(21.5	)
Dividends and returns of capital received from unconsolidated entities		301.8			229.1			301.8			(832.7	)		—
Net change in other investments		(0.2	)		(46.8	)		(163.3	)		129.1			(81.2	)

Net cash provided by (used in) investing activities		228.2			592.3			(46.0	)		(747.0	)		27.5
Financing activities
Issuance of common stock		20.6			—			—			—			20.6
Acquisition of treasury stock		(2.6	)		—			—			—			(2.6	)
Proceeds from financing element derivatives		—			79.3			—			—			79.3
Payments for financing element derivatives		—			(46.5	)		—			—			(46.5	)
Excess tax benefits from share-based payment arrangements		—			0.4			0.6			—			1.0
Dividends to common stockholders		(176.2	)		—			—			—			(176.2	)
Dividends to preferred stockholders		(33.0	)		—			—			—			(33.0	)
Issuance of long-term debt		—			—			27.6			(25.3	)		2.3
Principal repayments of long-term debt		—			—			(58.7	)		47.6			(11.1	)
Net proceeds from (repayments of) short-term borrowings		—			—			(30.4	)		32.1			1.7
Dividends and capital paid to parent		—			(301.8	)		(530.9	)		832.7			—
Investment contract deposits		—			4,100.0			183.8			—			4,283.8
Investment contract withdrawals		—			(7,343.3	)		(0.1	)		—			(7,343.4	)
Net increase in banking operation deposits		—			—			46.2			—			46.2
Other		—			(4.3	)		—			—			(4.3	)

Net cash used in financing activities		(191.2	)		(3,516.2	)		(361.9	)		887.1			(3,182.2	)

Net increase (decrease) in cash and cash equivalents		66.3			(549.4	)		6.9			113.2			(363.0	)
Cash and cash equivalents at beginning of period		304.6			1,249.2			713.0			(26.4	)		2,240.4

Cash and cash equivalents at end of period	$	370.9		$	699.8		$	719.9		$	86.8		$	1,877.4

On May 24, 2011, our shelf registration statement was filed with the SEC and became effective. The shelf registration replaces the shelf registration that had been in effect since June 2008, as it was scheduled to expire in June 2011. Under our current shelf registration, we have the ability to issue unsecured senior debt securities or subordinated debt securities, junior subordinated debt, preferred stock, common stock, warrants, depository shares, stock purchase contracts and stock purchase units of PFG, trust preferred securities of three subsidiary trusts and guarantees by PFG of these trust preferred securities. Our wholly owned subsidiary, PFS, may guarantee, fully and unconditionally or otherwise, our obligations with respect to any non-convertible securities, other than common stock, described in the shelf registration statement.

The following tables set forth condensed consolidating financial information of (i) PFG, (ii) PFS, (iii) Principal Life and all other direct and indirect subsidiaries of PFG on a combined basis and (iv) the eliminations necessary to arrive at the information for PFG on a consolidated basis as of December 31, 2012 and 2011, and for the years ended December 31, 2012, 2011 and 2010.

In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) PFG's interest in PFS and (ii) PFS's interest in Principal Life and all other subsidiaries, where applicable, even though all such subsidiaries meet the requirements to be consolidated under U.S. GAAP. Earnings of subsidiaries are, therefore, reflected in the parent's investment and earnings. All intercompany balances and transactions, including elimination of the parent's investment in subsidiaries, between PFG, PFS and Principal Life and all other subsidiaries have been eliminated, as shown in the column "Eliminations." These condensed consolidating financial statements should be read in conjunction with the consolidated financial statements. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the subsidiaries operated as independent entities.

	Principal Financial Group, Inc. Parent Only			Principal Financial Services, Inc. Only		Principal Life Insurance Company and Other Subsidiaries Combined			Eliminations			Principal Financial Group, Inc. Consolidated

	(in millions)
Assets
Fixed maturities, available-for-sale	$	—		$	—	$	50,939.3		$	—		$	50,939.3
Fixed maturities, trading		10.5			—		616.2			—			626.7
Equity securities, available-for-sale		—			—		136.5			—			136.5
Equity securities, trading		—			—		252.8			—			252.8
Mortgage loans		—			—		11,519.7			—			11,519.7
Real estate		—			—		1,180.3			—			1,180.3
Policy loans		—			—		864.9			—			864.9
Investment in unconsolidated entities		11,923.0			10,701.8		860.2			(22,616.0	)		869.0
Other investments		11.1			39.6		2,371.4			—			2,422.1
Cash and cash equivalents		207.1			612.5		4,241.3			(883.7	)		4,177.2
Accrued investment income		—			—		584.4			—			584.4
Premiums due and other receivables		0.1			1,122.1		2,206.7			(2,244.5	)		1,084.4
Deferred policy acquisition costs		—			—		2,673.8			—			2,673.8
Property and equipment		—			—		464.2			—			464.2
Goodwill		—			—		543.4			—			543.4
Other intangibles		—			—		927.2			—			927.2
Separate account assets		—			—		81,653.8			—			81,653.8
Other assets		78.1			51.0		1,003.4			(125.7	)		1,006.8

Total assets	$	12,229.9		$	12,527.0	$	163,039.5		$	(25,869.9	)	$	161,926.5

Liabilities
Contractholder funds	$	—		$	—	$	37,786.5		$	—		$	37,786.5
Future policy benefits and claims		—			—		22,436.2			—			22,436.2
Other policyholder funds		—			—		716.4			—			716.4
Short-term debt		—			—		2,564.1			(2,523.3	)		40.8
Long-term debt		2,448.6			—		222.7			—			2,671.3
Income taxes currently payable		—			0.1		47.2			(32.0	)		15.3
Deferred income taxes		—			—		712.6			(86.1	)		626.5
Separate account liabilities		—			—		81,653.8			—			81,653.8
Other liabilities		28.1			603.9		6,117.8			(603.7	)		6,146.1

Total liabilities		2,476.7			604.0		152,257.3			(3,245.1	)		152,092.9
Redeemable noncontrolling interest		—			—		60.4			—			60.4
Stockholders' equity
Series A preferred stock		—			—		—			—			—
Series B preferred stock		0.1			—		—			—			0.1
Common stock		4.5			—		17.8			(17.8	)		4.5
Additional paid-in capital		9,730.9			9,393.8		8,287.7			(17,681.5	)		9,730.9
Retained earnings		4,940.2			1,861.5		1,744.8			(3,606.3	)		4,940.2
Accumulated other comprehensive income		631.9			667.7		653.5			(1,321.2	)		631.9
Treasury stock, at cost		(5,554.4	)		—		(2.0	)		2.0			(5,554.4	)

Total stockholders' equity attributable to PFG		9,753.2			11,923.0		10,701.8			(22,624.8	)		9,753.2
Noncontrolling interest		—			—		20.0			—			20.0

Total stockholders' equity		9,753.2			11,923.0		10,721.8			(22,624.8	)		9,773.2

Total liabilities and stockholders' equity	$	12,229.9		$	12,527.0	$	163,039.5		$	(25,869.9	)	$	161,926.5

	Principal Financial Group, Inc. Parent Only			Principal Financial Services, Inc. Only			Principal Life Insurance Company and Other Subsidiaries Combined			Eliminations			Principal Financial Group, Inc. Consolidated

	(in millions)
Assets
Fixed maturities, available-for-sale	$	—		$	—		$	49,006.7		$	—		$	49,006.7
Fixed maturities, trading		268.7			—			703.0			—			971.7
Equity securities, available-for-sale		—			—			77.1			—			77.1
Equity securities, trading		—			—			404.8			—			404.8
Mortgage loans		—			—			10,727.2			—			10,727.2
Real estate		—			—			1,092.9			—			1,092.9
Policy loans		—			—			885.1			—			885.1
Investment in unconsolidated entities		9,828.0			9,762.9			827.2			(19,590.8	)		827.3
Other investments		7.0			3.0			2,148.5			—			2,158.5
Cash and cash equivalents		226.7			702.4			2,787.9			(883.1	)		2,833.9
Accrued investment income		1.8			—			613.4			—			615.2
Premiums due and other receivables		—			—			1,195.2			1.3			1,196.5
Deferred policy acquisition costs		—			—			2,428.0			—			2,428.0
Property and equipment		—			—			457.2			—			457.2
Goodwill		—			—			482.3			—			482.3
Other intangibles		—			—			890.6			—			890.6
Separate account assets		—			—			71,364.4			—			71,364.4
Other assets		14.8			10.4			926.1			(9.0	)		942.3

Total assets	$	10,347.0		$	10,478.7		$	147,017.6		$	(20,481.6	)	$	147,361.7

Liabilities
Contractholder funds	$	—		$	—		$	37,676.4		$	—		$	37,676.4
Future policy benefits and claims		—			—			20,210.4			—			20,210.4
Other policyholder funds		—			—			548.6			—			548.6
Short-term debt		—			50.0			318.9			(263.7	)		105.2
Long-term debt		1,351.7			—			213.1			—			1,564.8
Income taxes currently payable		(18.6	)		(0.9	)		12.0			10.6			3.1
Deferred income taxes		(22.5	)		(22.9	)		270.8			(16.7	)		208.7
Separate account liabilities		—			—			71,364.4			—			71,364.4
Other liabilities		18.5			624.5			6,264.1			(620.9	)		6,286.2

Total liabilities		1,329.1			650.7			136,878.7			(890.7	)		137,967.8
Redeemable noncontrolling interest		—			—			22.2			—			22.2
Stockholders' equity
Series A preferred stock		—			—			—			—			—
Series B preferred stock		0.1			—			—			—			0.1
Common stock		4.5			—			17.8			(17.8	)		4.5
Additional paid-in capital		9,634.7			7,870.2			7,543.4			(15,413.6	)		9,634.7
Retained earnings		4,402.3			1,660.3			1,907.5			(3,567.8	)		4,402.3
Accumulated other comprehensive income		258.0			297.5			296.2			(593.7	)		258.0
Treasury stock, at cost		(5,281.7	)		—			(2.0	)		2.0			(5,281.7	)

Total stockholders' equity attributable to PFG		9,017.9			9,828.0			9,762.9			(19,590.9	)		9,017.9
Noncontrolling interest		—			—			353.8			—			353.8

Total stockholders' equity		9,017.9			9,828.0			10,116.7			(19,590.9	)		9,371.7

Total liabilities and stockholders' equity	$	10,347.0		$	10,478.7		$	147,017.6		$	(20,481.6	)	$	147,361.7